INDUSTRY BRIEFS

Gas distribution

Pacific Enterprises Inc. (PEI), Los Angeles, increased its stake in two Argentine local gas distribution companies by purchasing for $40.1 million an added 9% interest in the holding companies Sodigas Pampeana SA and Sodigas Sur SA from Loma Negra Cia. SA. Sodigas Pampeana and Sodigas Sur each own a controlling interest in LDCs operating, respectively, in central and southern Argentina. PEI paid $48.5 million for its initial 12.5% interest in 1996.

Drilling-production

Chevron Nigeria Ltd. reported first oil from Opolo field off Nigeria in the western Niger Delta. Opolo is the first of four new oil fields scheduled to begin production this year under a joint venture of Chevron and Nigerian National Petroleum Corp. (NNPC). Opolo is producing 20,000 b/d in 140 ft of water. Interests in the field are operator Chevron 40% and NNPC 60%.

Ranger Oil Ltd.,
Calgary, let contract to Oceaneering International Inc. (OII), Houston, to conduct a front-end engineering design (FEED) study for redevelopment of Espoir field off Côte d'Ivoire. The FEED study will examine all main components, refine the basic Espoir design, optimize production facility design, develop a detailed cost estimate and project schedule, and evaluate several alternatives. OII provided operational support at Espoir during its initial production period in 1982-88.

U.S. Minerals Management Service's
enforcement program has collected $2 billion since 1982 for royalty underpayments and interest, or 2.2% of $92.3 billion in royalties MMS collected during that same period.

Pakistan's
Oil & Gas Development Corp. (OGDC) was drilling in Shuja Jakhro village, about 10 km from Shahdadpur in Sindh province, when a gas blowout occurred. Residents in area villages were evacuated. An OGDC official said four wells had been drilled and testing of Jakhro-1 well indicated a gas/condensate reservoir at 3,000 m.

Elf Congo
let a 410 million franc contract to Bouygues Offshore SA (BOS) and two of its joint ventures (JVs) to supply two platforms and lay associated pipelines and electric cables for Kombi and Likalala fields off Congo. The firms will perform engineering, procurement, construction, transportation, and installation of the platforms, plus hookup and precommissioning of the facilities. The platform jackets will be built at the Pointe Noire Yard in Congo by BOS and transported to the field by Saibos CML, a JV of BOS and Saipem SpA. Decks will be built by Rosbos, a JV of BOS and Rosetti SpA, in Italy. Jackets, decks, pipelines, and cables will be installed by Saibos Castoro Otto. Delivery is planned for first quarter 1999.

Exports-imports

Turkmenistan and Russia agreed in principle to export 700 bcf of gas from Turkmenistan to Ukraine through Russian gas firm Gazprom's pipelines this year. The agreement follows a breakdown in negotiations between Turkmenistan and Russia in January, when Gazprom set a $1.75/1,000 cu m tariff charge for every 60 miles of pipeline.

TransCanada Gas Services,
Calgary, a unit of TransCanada PipeLines Ltd., applied to Canada's National Energy Board (NEB) to export 30 MMcfd of natural gas to U.S. New England states for 10 years beginning Nov. 1. The gas will be exported from East Hereford, Que., and sold to local distribution companies, industrial users, and power generators in the region. The gas would be purchased from Signalta Resources Ltd. in Alberta.

Renaissance Energy Ltd.,
Alberta, applied to NEB to export about 24.4 MMcfd of natural gas to the Northeast and Mid-Atlantic regions of the U.S. for 10 years beginning in November. The gas, which would be exported from Niagara Falls, Ont., would be sold to U.S.-based Renaissance Energy Inc. Terms are for 85.5 bcf over the contract period.

Refining

Côte D'Ivoire will privatize its only refinery this year, the country's oil ministry said. The government wants a strategic partner willing to invest $84 million in the Ste. Ivoirienne de Raffinage (SIR) plant to expand capacity to 88,000 b/d from 65,000 b/d. The 2-year expansion plan will include increasing hydrocracking capacity to 17,300 b/d from 13,600 b/d.

Tyumen Oil,
a Russian firm that takes its name from a major oil producing region in Siberia, will construct a 20,000 b/d refinery in the Nagadan region of far eastern Russia to refine crude oil from fields off Sakhalin Island in the Okhotsk Sea, expected to start up in 1999. The $100 million refinery will enhance marketability of oil from Sakhalin fields.

Pak-Arab Refinery Co. Ltd.,
a JV of Pakistani and Abu Dhabi governments, let a $577 million contract to Japan's Marubeni Corp. and JGC Corp. to build a 100,000 b/d refinery in Pakistan. A group of lenders led by Japan's Export-Import Bank will provide financing for the project. The refinery will be built at Mehmood Kot, Punjab. The plant will start up by late 2000.

Exploration

Anadarko Petroleum Corp., Houston, and partners reported the biggest flow rate from a discovery well on their Algerian holdings. On test, the El Merk North No. 1 well on Block 208 in Algeria (see map, OGJ, Jan. 27, 1997, p. 31) flowed 21,395 b/d of 47° gravity oil and 15.3 MMcfd of gas through a 11/2-in. choke from Triassic Tagi. A second zone flowed 35.7 MMcfd of gas and 585 b/d of oil through a 40/64-in. choke. The well cut 119 ft of net hydrocarbon pay. Partners in the production-sharing contract are operator Anadarko 50%, Lasmo Oil Ltd. 25%, and Maersk Olie Algeriet AS 25%.

Chieftain International Inc.,
Dallas, reported a gas/condensate discovery on East Cameron Block 34, 10 miles off Louisiana in 30 ft of water. The company said the well logged more than 100 net ft of gas pay in multiple zones below 10,350 ft. The well will be completed, with initial production expected by yearend. Chieftain has a 40% working interest in the well and block; Basin Exploration Inc. holds 60%.

Polish Oil & Gas Co.
(POGC), Warsaw, agreed to acquire a farm- out of a one-third interest from FX Energy Inc., Salt Lake City, in a 1.4 million acre western Carpathian concession in Poland. POGC will pay a share of exploration and development costs. Apache Corp. owns the remaining one-third interest. The agreement also grants FX and Apache an option to participate on the same terms in POGC's 1.5 million acre joint study area in the central Carpathians. FX also granted an option to POGC and Apache to participate in a new 1.7 million acre Carpathian area on which it recently made an application. The concessions are divided into 1,000 sq km blocks.

Pakistan
granted an exploration license to a JV of Pakistan Petroleum Ltd. (PPL) and Pakistan Government Holdings on the 3,965 sq km Manzai block. The block is near Bannu in the country's northern province. The license requires operator PPL to conduct seismic surveys and drill at least one well in the first 3 years.

A group led by
Kerr-McGee Corp., Oklahoma City, obtained a 4.8 million acre concession on Block W-7/38 in the Andaman Sea off Thailand in 600-9,500 ft of water. Operator Kerr-McGee said seismic surveys on the block will be conducted this year, with the first exploratory well planned in 1999. Partners are: Kerr-McGee 42.5%, Amerada Hess Exploration Co. Ltd. 42.5%, and Pttep International Ltd. 15%.

Petrochemicals

U.S. Justice Department reported that Unocal Corp. will spend $7 million to resolve claims that its Kenai, Alas., ammonia/urea plant violated Clean Air Act emissions limits. Unocal will pay a $550,000 civil penalty and spend more than $6.6 million on a supplemental flare and scrubber system.

A joint venture of
Total and Abu Dhabi National Oil Co. is considering increasing the capacity of its urea/ammonia plant in Abu Dhabi to 1.2-1.3 million metric tons/year from 630,000 tons/year at a cost of $350 million.

Sun Co. Inc.,
Philadelphia, will acquire a phenol plant and merchant customer base from AlliedSignal Inc., Morristown, N.J. The agreement guarantees phenol supplies for AlliedSignal's downstream nylon businesses. The Frankford, Pa., plant manufactures more than 1 billion lb/year of phenol, 620 million lb/year of acetone, and 70 million lb/year of alpha-methylstyrene. Sun plans to begin the first phase of a plant expansion previously announced by AlliedSignal, which will boost phenol production by 8%.

Air Liquide America Corp.,
Baton Rouge, La., will spend $150 million for a new air separation and 80-MW cogeneration complex at Geismar, La. The units will produce 5,200 tons/day of gaseous oxygen and nitrogen, which will be sold through the company's existing pipeline network from Baton Rouge to New Orleans. Liquefied oxygen, nitrogen, and argon will be produced for the merchant market. The decision follows conclusion of a long-term contract to supply gaseous oxygen and steam via pipeline to BASF Corp. for its petrochemical plants.

Companies

Meridian Resource Corp. is acquiring all of Shell Oil Co.'s South Louisiana production and exploration properties for 39.9% of Meridian's stock, valued at $135 million, and $42.5 million in cash. Shell will hold one seat on Meridian's board. The transaction will create a company that will control more than 329,000 gross onshore acres and own 2,800 sq miles of onshore 3D seismic. Meridian also will receive various non-producing assets, including exploration acreage, lease options, prospects, access to grids of 2D and 3D seismic, and physical assets such as gas plants, compressors, buildings, boats, barges, and other vehicles.

Williams Cos. Inc.,
Tulsa, gained U.S. Federal Trade Commission approval to acquire Mapco Inc. (OGJ, Dec. 1, 1997, p. 48) after agreeing to provide Midwest pipeline capacity to propane terminal operator Kinder Morgan Energy Partners and allow any new competing pipeline to connect to its Wyoming gas processing plants. The FTC had charged that the acquisition of Mapco would jump propane costs for Midwestern consumers by at least $2 million/year and transportation costs for producers in Wyoming $8 million/year.

Syntroleum Corp.,
Tulsa, and SLH Corp. will merge in a deal worth $535 million. SLH, Shawnee Mission, Kan., already owns 31% of Syntroleum. SLH will exchange 1.47 shares for each of the 13 million Syntroleum shares it doesn't hold. Upon closing, SLH shareholders will own 34% of the combined company, which will retain the Syntroleum name. SLH management and six of SLH's eight directors will be replaced with Syntroleum management and directors. The merger provides Syntroleum, which has developed a commercial gas-to-liquids process, access to $50 million in funds.

Seagull Energy Corp.,
Houston, is acquiring a package of onshore oil and gas properties in East Texas and western Oklahoma by paying $102 million in cash for the stock of privately held BRG Petroleum Inc., Tulsa. Seagull said BRG has proved oil and gas reserves of 102 bcfe. Production from the properties net to the combined BRG interests averaged 18 MMcfd of gas and 400 b/d of oil and NGL. Seagull has identified more than 160 drilling locations and 60 recompletions in East Texas. Seagull will assume BRG's 50% working interest in the fields.

ARCO will sell its U.S. coal assets to Arch Coal Inc., St. Louis, for $1.14 billion. The company's holdings include Black Thunder and Coal Creek mines in Wyoming, West Elk mine in Colorado, and, through its Canyon Fuel Company LLC partnership with Itochu Corp. of Japan, three mines in Utah. Arch will combine ARCO's Wyoming coal operations with its own in a new JV called Arch Western Resources LLC. Arch will own 99% of the new company, and ARCO 1%.

California Public Utilities Commission
approved the merger of Pacific Enterprises Inc., Los Angeles, and Enova Corp., San Diego. The merged companies will become Sempra Energy. Final regulatory approvals are expected from the U.S. Federal Energy Regulatory Commission, which conditionally approved the merger June 25, 1997, and from the U.S. Securities and Exchange Commission. Based on stock closing prices, the deal has a market value of $6.6 billion. Enova and Pacific Enterprises jointly own Energy Pacific, a retail energy-services marketing company, and Sempra Energy Trading, a wholesale energy commodity trading firm.

Queen Sand Resources Inc.,
Dallas, is acquiring nonoperated royalty interests and net-profit overriding royalty interests in more than 530 wells in 40 fields in East Texas, South Texas, and the Midcontinent area from two Morgan Guaranty Trust Co. of New York commingled pension trust funds. The purchase price is $150 million in cash for net production revenues accrued since Oct. 1, 1997, and capital expenditures incurred since that date. The company claims reserves of 127.7 bcf of natural gas and 3.7 million bbl of oil, with an estimated reserves-to-production ratio of more than 10 years, 80% of which are classified as proved developed producing.

Chevron Corp. and Texaco Inc.
will establish a joint venture of their respective global marine and industrial fuels and marine lubricants businesses. Texaco will have 69% ownership of the new company, and Chevron 31%. Operational start-up is anticipated in the third quarter.

LNG

Mitsui OSK Lines Ltd. and Nissho Iwai Corp. unit Nusantara Shipping Ltd. let contract to NKK Corp. for construction of a 22,500 cu m liquefied natural gas carrier. The vessel, Pertamina's first membrane-type LNG carrier, will be built at NKK's Tsu Works. Scheduled for delivery in October 2000, the carrier will use the GTT Mark III membrane cargo containment system. Indonesian state firm Pertamina will charter the vessel to transport LNG from its Bontang terminal to Japan for sale to Hiroshima Gas Co. Ltd. and Nippon Gas Co. The firms have signed supply contracts for 200,000 tons/year of LNG.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.